According to the Bureau of Labor, more than 1/3 of daycare workers operated their own businesses and most of these did so out of their own homes. Parents like the idea of in home daycares because it provides their children with a personal environment and more attention than what is available at a regular facility. But if you are a daycare provider in your own home, you need to make sure that you are filing your taxes in the proper manner. The IRS will require that you file as a business operator or a self-employed individual any time you run these services out of your home. If you run a personal daycare out of your home, make sure to contact the professionals at BTL & Company, P C, Tax & Accounting in Beaverton, OR to ensure you get the work done quickly and that all the paperwork is done on time.
Be Informed
Running a daycare service out of your home can be a great way to make an income, especially if you like working with children. You can work from home, help raise children, and choose your own hours and income. But before you go and do this, you need to make sure that you are informed. Learn what filing statuses you will have to do on your tax returns and whether you should choose a separate entity for running this business. The professionals at Falisha Griffin can take a look at your tax filing status and determine if you should make some changes to save you money during tax season.
Keep Records
As a daycare provider, you will be responsible for keeping track of all the receipts and paperwork in your business. Not only should you take care of the receipts when it comes to how much you make and what you sell, but you should also keep track of some paperwork such as the amount of your mortgage and how much you are paying while running the business. Keep track of mortgage insurance, taxes, home insurance, and more because you will be able to deduct some of these expenses during tax time. If you do any rent in the home, keep receipts for this as well.
Measurements
You are not likely using your whole house as the daycare facility, so you will need to figure out how much of the home is being used. Figure out the total square footage of the home and then divide it up by how much room you think you use throughout the whole house. For example, you will probably use the living room and kitchen quite a bit, but don’t forget bathrooms and bedrooms if you use them for naptime and other things during daycare. If you need some assistance in figuring out how much you are able to use on your taxes for space in the home, make sure to contact the professionals at Falisha Griffin to help you out.
Purchases
You may be able to deduct some of the expenses that you have made for the daycare. You can count things such as playground equipment, storage containers, bookcases, books, toys, computers, and other things. If you purchased them solely for the use in your daycare, you can deduct part of their expenses on your tax return. Make sure that you are careful with this part though. You are not allowed to just deduct anything that you would like in order to save money. You will need to have the proper receipts in place to ensure that the deductions are allowed on your tax return. When you are ready to file the tax return for your daycare business, you will need to bring in all of these receipts to ensure that you are getting the maximum allowed deductions. Our professionals at Falisha Griffin will be able to look over these receipts and will ensure that you get everything you deserve this tax season.
Other Staff
In some cases, you could be the sole proprietor of your in home daycare. This is often the case as you will be the only one who is taking on the children and giving them the care that they need. But in other cases, such as when you want to take on more children or want to have some backup for when you need to be gone, you may hire out some help with the daycare. If you do pay someone to help you out with your daycare, you will need to keep records of how much you pay them as well as which benefits you are going to give to them. If you pay any of them more than $600 during a year, you must make sure that you fill out the 1099 for them so they can fill out their taxes as well. This is another place where you can deduct money on your tax returns, especially if you offered some extra benefits to the employees, so much sure you keep good records and bring these in to the professionals at Falisha Griffin to get the assistance that you need with keeping all your affairs in order.
If you are a day care provider out of your home and need to file your taxes, make sure to contact BTL & Company, P C, Tax & Accounting in Beaverton, OR. We have the experience that you need to take care of your tax return this year and to help keep more money in your pocket than ever before. Contact us today.
BTL & Company, P C, Tax & Accounting